The Settlor
The settlor is the person who creates the trust by transferring assets into it. In most New Zealand family trusts, the settlor is also one of the trustees and a beneficiary—wearing multiple "hats."
When you set up a trust, you are usually the settlor. You decide what assets go into the trust and help shape its rules through the trust deed. Once assets are transferred, however, they legally belong to the trust—not to you personally anymore.
Good to know:
While you can remain involved as a trustee, it's important to understand that once assets are in the trust, you can't simply take them back whenever you want. The trustees must follow the trust deed and act in the interests of all beneficiaries.
The Trustees
Trustees are the people who legally own and manage the trust's assets. They have significant responsibilities and must act in the best interests of the beneficiaries—not themselves.
Most family trusts have two or three trustees. Most trust deeds say that all trustee decisions must be unanimous. A common arrangement is:
- You and your partner as the primary trustees who handle day-to-day decisions
- An independent trustee such as a trusted friend, family member, or professional, who provides oversight
"Choosing the right trustees is one of the most important decisions you'll make. They'll be responsible for your family's assets—potentially for decades."
Under the Trusts Act 2019, trustees have clear legal duties including acting honestly and in good faith, exercising reasonable care and skill, and keeping proper records. Some trustee duties can be moderated by the trust deed. We listen & advise on what is appropriate for you.
The Beneficiaries
Beneficiaries are the people who can benefit from the trust's assets. This usually includes:
- You and your partner (allowing you to still live in and use trust assets)
- Your children and grandchildren
- Future descendants or other family members. Often, a trust deed allows beneficiaries to be added, or removed. We help you decide whether to allow this.
Being a beneficiary doesn't mean you automatically get trust assets. The trustees decide when and how to distribute assets, following the rules in the trust deed and their assessment of what's appropriate.
Under the Trusts Act 2019, beneficiaries have a right to certain information about the trust. Trustees must consider providing basic trust information to adult beneficiaries, though there's some flexibility about how much detail to share.
Wearing multiple hats
In most family trusts, the same people wear several hats. You might be the settlor who creates the trust, a trustee who manages it, and a beneficiary who can benefit from it.
This is normal and practical, but it's important to understand when you are acting in each capacity. When you are wearing your "trustee hat," you must consider all beneficiaries fairly—not just yourself.
Getting these roles right from the start saves problems later. Our team helps you structure your trust properly and understand your responsibilities.